Correlation Between AuraSource and EON SE

Can any of the company-specific risk be diversified away by investing in both AuraSource and EON SE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AuraSource and EON SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AuraSource and EON SE ADR, you can compare the effects of market volatilities on AuraSource and EON SE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AuraSource with a short position of EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AuraSource and EON SE.

Diversification Opportunities for AuraSource and EON SE

-0.57

Correlation Coefficient

AuraSource  EON SE

Excellent diversification

The 3 months correlation between AuraSource and EON is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding AuraSource and EON SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE ADR and AuraSource is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AuraSource are associated (or correlated) with EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE ADR has no effect on the direction of AuraSource i.e., AuraSource and EON SE go up and down completely randomly.

Pair Corralation between AuraSource and EON SE

If you would invest  1,060  in EON SE ADR on August 31, 2024 and sell it today you would earn a total of  0.00  from holding EON SE ADR or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.61%
Values	Daily Returns

AuraSource  vs.  EON SE ADR

AuraSource

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AuraSource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

EON SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EON SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, EON SE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AuraSource and EON SE

The main advantage of trading using opposite AuraSource and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AuraSource position performs unexpectedly, EON SE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in EON SE will offset losses from the drop in EON SE's long position.

The idea behind AuraSource and EON SE ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.